Sri. P.C. Francis Pookkodan House, Algappa Nagar P.O. Thrissur District - 680001 vs The Commissioner of Income Tax Thrissur

K. Vinod Chandran, J.—The appellant is an individual assessee and challenges the order of the Tribunal confirming the orders of the lower authorities with respect to block proceedings for the period 1.4.1988 to 30.7.1998. Initially, the residential premises of the assessee was searched on 12.12.1996 and on the basis of incriminating documents recovered, notice was issued u/s 158BC of the Income Tax Act, 1961, hereinafter referred to as "the Act". The said proceedings for the block period 1.4.1986 to 12.12.1996 ended in Annexure-A. The same is not under challenge herein.

Subsequently, on 30.07.1998, the business premises of M/s.Puthur Drugs, Thrissur was searched and documents were seized, indicating investments made by various persons as partners of M/s.Hotel Luciya Drive Inn Restaurant, Chalakudy. The assessee''s name also figured as a partner, who has invested money in the venture. Such investment revealed from the seized documents from M/s.Puthur Drugs, Thrissur was not disclosed by the assessee in the cash flow statement filed in the earlier proceedings. Hence, notice was issued u/s 158BD of the Act.

The seized documents showed investments made on 5.4.1995, 25.4.1995, 30.4.1995, 4.5.1995 and 8.5.1995, totalling Rs. 4,20,000/-. The assessee contended that he had invested only Rs. 1,50,000/- as per the deed of partnership entered into on 28.4.1995 (Annexure-C herein) and had retired from the partnership by deed of retirement dated 12.4.1996 (Annexure C1). On retirement, it was contended that the amount invested was returned by the continuing partners by way of cheque. In such circumstance, it was contended that there was no warrant for addition of Rs. 4,20,000/-; as is alleged to have been revealed from the documents seized from another assessee''s business premises. The Assessing Officer rejected the contention, finding that the seized materials were Minutes Books of the partnership firm M/s.Hotel Luciya Drive Inn Restaurant and the proceedings recorded therein were in the handwriting of the Manager of the said firm, as was admitted by the assessee. The Assessing Officer also found that one of the seized documents revealed that the actual investment was not Rs.30 lakhs as is stated in the partnership deed dated 28.4.1995, but was Rs. 95 lakhs. The assessee was in appeal before the first appellate authority and the Tribunal, both of which went against him.

Assessee is before us raising a number of questions of law with respect to the legality of the addition made by the Assessing Officer on the basis of documents recovered from another assessee''s premises. The assessee also alleged that there was absolutely no cogent material available to assume a surviving partnership and in such circumstance, the addition of alleged amounts brought in by the assessee to the partnership on various dates could not at all be sustained. In such circumstance, the assessee contends that the order of the Tribunal is erroneous and is based on a perverse appreciation of facts.

We have given our anxious consideration to the arguments advanced on behalf of the assessee by the learned counsel Sri.Dale P.Kurian. Much reliance has been placed on the date of the partnership deed and the retirement deed to contend before us that the alleged payment of money into the partnership firm was beyond the date of retirement. On facts we find that it is otherwise. The first of such payments made by the assessee, noticed by the Assessing Officer, is on 5.4.1995 and the last is dated 8.5.1995. Annexure-C partnership deed was entered on 28.4.1995 and the retirement deed, Annexure C1, on 12.4.1996. All the above payments alleged to have been made by the assessee into the partnership was before the deed of retirement. True, there are two alleged payments even before the alleged partnership was entered into, i.e., on 5.4.1995 and 25.4.1995. However, we find from the first appellate authority''s order that the Assessing Officer had placed reliance on a document, Exhibit A20, which is dated 5.4.1995, which talks at length, according to the first appellate authority, regarding the total cost involved in the purchase of Hotel Luciya, which is revealed as Rs.95 lakhs. It is evident that the partners had pooled in money immediately prior to the execution of the deed and had executed the deed, but not showing the entire amounts brought into the partnership. It is also to be noticed that the Tribunal had extracted the findings of the first appellate authority, wherein the first appellate authority has found seized documents to be in the form of Minutes Books and was not mere scribblings or casual jottings. The Tribunal order also reveals that page 34 of the paper book filed by the assessee revealed that that the seized document contains the signature of the assessee also. It is also evident that by Annexure-F reply, the assessee had admitted that the handwriting in the bundle of papers seized "appear to be in the handwriting of the manager of the Firm". Even if such a statement cannot be taken as a clear admission, we are of the opinion that nothing turns on the mere denial of the handwriting. We have earlier noticed that the Tribunal recorded that the seized documents even contained the signature of the assessee. The dates on which the alleged payments were made towards the partnership firm also tallies with the date on which such partnership was entered into. None of the payments with respect to which the additions were made related to the period after the retirement of the assessee. The entire issue turns on facts and the first appellate authority and the Tribunal have elaborately considered the same and the findings cannot at all be termed as perverse. Absolutely no question of law arises from the order of the Tribunal. The appeal is only to be rejected and we do so.